The Child Tax Credit in the American Rescue Plan has been in the news a lot recently. In fact, you may have already received a payment via direct deposit or check in the mail. Here are some quick facts about the revamped Child Tax Credit and how it may affect you:
- The Child Tax Credit in the American Rescue Plan provides the largest Child Tax Credit ever.
- It has increased from $2,000 (2020) to $3,600 (2021) per child for each child under age 6.
- For each child ages 6 to 16, it has increased from $2,000 to $3,000.
- It also now makes 17-year-olds eligible for the $3,000 credit.
- The IRS began sending monthly payments (up to half of your total amount) this year, in July.
- It will be broken up into monthly payments, which means payments of up to $300 per child under age 6 and $250 per child ages 6 to 17 monthly.
- You’ll get the remainder of the credit when you file your taxes next year.
- The new Child Tax Credit in the American Rescue Plan is only for 2021, but there is a chance it could be extended.
- Many families are opting out of monthly payments to get the full Child Tax Credit when they file taxes in the spring. You can do that here.
- The program has income eligibility requirements which are available in the IRS publication FS-2021-10.
If you opt to receive the monthly payments, you can use them for anything you want or need. The payments could be put to good use by paying down high-interest debt, such as credit cards. If you don’t need the money right away, it’s always a good idea to save for the future. If you don’t already have a savings account set up, consider opening one today.
Contact us today to find out more about saving for your financial future.
Queensborough National Bank and Trust and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
Founded in 1902, Queensborough National Bank & Trust Co. is Georgia’s community bank with more than 25 locations throughout Georgia. Queensborough was named Best Small Bank in Georgia for 2021 by Newsweek. For more information, visit www.QNBTRUST.bank and find Queensborough on Facebook, Twitter, LinkedIn, YouTube and Instagram.